Hardware is _kind of_ different. Hardware is usually binned for tolerances/expected demand. e.g. the manufacturing process for an i5 and an i3 might be the same, but the acceptable tolerances for an i3 are lower. If the part fails the test for an i5, it will be sold as an i3, and the extra features disabled. This makes sense, otherwise you run into a bad press part lottery.
(of course they do also bin based on demand/sales, which is scummy.)
>of course they do also bin based on demand/sales, which is scummy.
Why is this scummy? It's a free market and it's not a life saving drug, they can ask for whatever they want, nobody is forcing you to buy it.
That's like saying "Software engineers are paid according to demand/market which is scummy."
The best business strategy for companies and professionals alike is to find a niche with less competition where you are a leader(cough, monopoly, cough) and charge whatever the market will bear. If Apple/Microsoft/AMD/Intel can get away with that it means the market can bear it. The fact that you don't like it, is another issue.
Because it's price gouging. They would be actively restricting supply of their highest-performing parts for no other reason than to charge a higher price for them. Software engineers don't do this, they're highly paid because demand is so huge that it outstrips even an ample supply.
Of course, in practice, it can be hard to tell whether intentional "crippling" is going on. Yield problems are common and might manifest in the exact same way, after all - for example, chips that don't "make timing" for their design frequency can be sold for lower specs.
No, it's deliberate discounting of economy products!
What's the difference? I don't know either. Price discrimination is a very real thing that exists virtually everywhere. It's why the market will bear Beats headphones in the same shops that sell generics at 20% the price.
At the end of the day, a manufacturer doesn't "owe" you something at cost. The idea of capitalism is that competition in the market will drive prices down instead, and it does. But one side effect is that customers and sub-markets that are able to bear higher markups on their versions of stuff are asked to pay it even when it doesn't make sense at the level of per-part costs.
So it's true, that that Beats headset costs only $4 to make and "should" be available much cheaper than it is. But it isn't, and the reason is simply that people are willing to buy them at $200. If you're not, that seems unfair, I agree. But... what's the alternative?
That's a very nice way and non-scummy way of putting it, yes. If that deep discount compared to the "full-featured" price was made clearer, I assume that many people would not even find it scummy that these discounts are conditioned to being sold a "crippled" version of the product. So, depending on the "framing" you pur on this, you can nicely account for either of these perspectives.
I'm not really sure what you want them to do in their marketing materials. it's not like Intel keeps it a secret that the hedt parts are just xeons with higher boost clocks and ecc disabled. the general public doesn't even understand what ecc is, nor are they considering buying a $1000+ cpu. I doubt most people even understand hyperthreading (the main difference between i7 and i5).
The important point was the economics in the later stuff. Price discrimination isn't about "framing", it's just the way competition works in the case of multiple submarkets needing similar products but having different price tolerances. You can't "fix" this with framing or spin, it's just the way markets work.
Market segmentation is what allows you to have cheap things. Next time you walk through first class to your coach seat remember that those people are subsidizing you.
"price gouging" is a myopic view of what goes on in the CPU/GPU market.
intel/amd could not afford to sell hardware at consumer prices if buyers could turn around and put those consumer parts in servers at scale. in the alternate universe where certain features aren't disabled for consumer parts, your i7 costs as much a a xeon; you don't get xeon features for i7 money.
Yes, as someone has said elsewhere, they might essentially be selling you their chips at a deep "discount", while making that discount conditional on forgoing some desirable features. It's pretty much the same thing, just with a different framing placed on it.
One of the reasons that free market capitalism enjoys wide support in the western world is because of the "consumer surplus".
That is because for the vast majority of transactions, there is a very large gap between the highest price a consumer is willing to pay and the lowest price a producer is willing to accept. The canonical example is for essentials like food: people are willing to pay every single penny they have for food for their family. OTOH, farmers are willing to sell wheat in bulk for under 10 cents a pound.
For obvious reasons farmers cannot set different prices for each pound of wheat to get "all the money". It's seen as deeply unfair when the vast majority of industries are price takers while a select few can charge the maximum a customer can bear. If every industry could effectively price differentiate could we'd be spending all our money on food with no money left to buy CPU's and our whole free market system would collapse.
Not sure I'm getting all the subtleties of your argument but for food, say for example suddenly they charged 100x the price for wheat, people would switch to something different.
Of course people need food, but there are many kinds of food and it's competitive between the different foods.
Lifesaving drugs are something where it's often difficult to substitute.
But even if it were a life-saving drug, would it exist at that point in time (rather than a few decades later) if billions of dollars hadn't been spent to bring it to market (instead of investing the money in any one of a number of other things, including non-pharmaceutical healthcare research), and would that money have been invested in the first place if there hadn't been an expectation of a return on investment that took into account the risk of failure?
> Why is this scummy? It's a free market and it's not a life saving drug, they can ask for whatever they want, nobody is forcing you to buy it.
That's pretty much the only argument _for_ doing it; it's the equivalent of defending your argument as free speech - just because you _can_ say it, doesn't mean you should.
i agree , you can also add vmware to this list. they ship a free (and great imo) hypervisor which has full features built in, with only a license key unlocking those advanced (and expensive) features. this also applies to almost every piece of demoware software.
They also disable ECC, virtualization, VFIO, and other features for consumer products. AMD and Nvidia regularly produce a single GPU chip that gets used in consumer and PRO cards, costing much more on pro cards, with the only difference being packaging and the software. In effect, pro users subsidize development for everyone else in order to avoid some friction, but IMO that's fine, because pro users (CAD, design) have the most to gain from such development.
Kinda. The manufacturing process will always produce defects in these chips. A run can produce 100 chips (let's say)- 10 of those are perfect. 100% functional, and are sold as the highest quality chip. the next 20 are 99.99% functional. These are binned into their respective segments based on how well they test. These are sold as lower end parts. Maybe a core doesn't work or it can't clock as high.
Maybe the other 70 have some major issue with the special components, so they are only 99% functional and therefor can't be used in the high end segment, but can be used in the consumer chips.
Not every chip is perfect, which is why there exists different product classes. For some chips, an i5 is just an i7 that didn't fully pass validation.
I understand how that works. My point was just that it's not always about binning, sometimes it's all market segmentation. Drawing both sides of a polygon in a single pass is a pro GPU driver feature that has nothing to do with defects or binning. I think if Intel has unexpectedly good yield with low defects, they may end up using silicon good enough to support hyperthreading in a CPU that lacks the feature. They disable silicon-viable features for consumer chips on the regular --it's just to guarantee users of those features pay for Xeons.
If you bin based on tolerances, you kind of have only two options: either also bin chips that meet tolerances in order to satisfy demand for the lower-binned chip or introduce a separate parallel chip alongside the binned ones that actually targets their specs (which you would still have to bin downward).
It's scummy and inefficient from an obvious human perspective to intentionally cripple a superior product in order to target a cheaper market, but that's the natural result of market actors being incentivized to maximize their own return, they don't really have any reason to care about the human side of that argument.
> or introduce a separate parallel chip alongside the binned ones that actually targets their specs (which you would still have to bin downward).
you know, I hadn't actually thought of that. If you did this, presumably it would involve the cost of setting up another manufacturing line, (colossal), and you'd _still_ have binning issues. Presumably the tolerances would be looser however; if you can build within 5% power usage of X, you should be able to _easily_ build within 5% power usage of (x/2).
(of course they do also bin based on demand/sales, which is scummy.)